The Lowdown on Interest Only Mortgages
How Do I Qualify?
An interest-only mortgage is a type of mortgage in which the mortgagor (the borrower) is required to pay only the interest on the loan for a certain period. The principal is repaid either in a lump sum at a specified date, or in subsequent payments.
An interest-only mortgage is one where you solely make interest payments for the first several years of the loan, as opposed to your payments including both principal and interest.
Interest-only payments may be made for a specified time period, may be given as an option, or may last throughout the duration of the loan (mandating you pay it all back at the end).
Usually, interest-only loans are structured as a particular type of adjustable-rate mortgage.
While interest-only mortgages mean lower payments for a while, they also mean you aren't building up equity, and mean a big jump in payments when the interest-only period ends.
Why Should You
This type of loan can be used for those individuals with more unique circumstances, such as a small businesses with write-offs, professional real estate investors or freelance professionals working on a contract basis.
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Whether you’re looking to purchase a new home or refinance your existing home, Equity Direct Financial can provide all the help you need.